A global survey on the state of data drivenculture within startups
ContentsSECTION ONEAbout Geckoboard         1SECTION TWOAbout Econsultancy      2SECTION THREEForeword                3SEC...
SECTION ONE                              About GeckoboardGeckoboard is a hosted status board                able to better...
SECTION TWO                              About EconsultancyEconsultancy is a global independent             decisions, bui...
SECTION THREE                                       ForewordGeckoboard is pleased to present the               data, how m...
SECTION FOUR                             Executive SummaryThis report explores the general attitude of startups towards me...
SECTION FOUR: EXECUTIVE SUMMARYThe findings of this research can be summarised as follows:The vast majority of respondents...
SECTION FOUR: EXECUTIVE SUMMARYThe survey also showed that real time data and dashboards are increasingly beingadopted by ...
SECTION FIVE                                   MethodologyThis report is based on a global survey of       Econsultancy al...
FIGURE 1: WHAT IS YOUR POSITION IN THE ORGANISATION?                                   FOUNDER / CEO                      ...
SECTION SIX                                        Findings6.1 DATA DRIVEN CULTUREDefinition: A ‘Data Driven Organisation’...
SECTION SIX: FINDINGS - DATA DRIVEN CULTUREFigure 3 shows that the majority of                     this area. A total of 7...
SECTION SIX: FINDINGS - DATA COLLECTIONNearly a fifth (18%) of respondents in the         assessment of business performan...
SECTION SIX: FINDINGS - DATA COLLECTION  Figure 6 shows the number of employees              employees, however also revea...
SECTION SIX: FINDINGS - DATA COLLECTIONRESPONDENT COMMENTS: ‘HOW MANY FULL-TIME EMPLOYEES DOES YOUR COMPANY CURRENTLYHAVE ...
SECTION SIX: FINDINGS - DATA COLLECTIONFIGURE 7: WHAT IS THE BALANCE BETWEEN RESOURCES SPENT IN GATHERING DATA (BIG DATA) ...
6.3 DATA COMMUNICATIONFIGURE 8: WHAT IS THE MOST COMMON FORMAT FOR DATA COMMUNICATION IN YOURORGANISATION?                ...
SECTION SIX: FINDINGS - DATA COMMUNICATIONFIGURE 9: ARE THERE ANY PROCESSES IN PLACE TO MAKE SURE THAT DATA IS UNDERSTOOD ...
SECTION SIX: FINDINGS - DATA COMMUNICATIONRESPONDENT COMMENTS: ‘ARE THERE ANY PROCESSES IN PLACE TO MAKE SURE THAT DATA IS...
SECTION SIX: FINDINGS - DATA COMMUNICATIONFigure 9 shows a chart of the data in Figure               It may be the case th...
6.4 DECISION MAKING - METRICSFIGURE 11: IS YOUR ORGANISATION CONFIDENT THAT IT IS MEASURING THE RIGHT METRICSAND KPIS?    ...
SECTION SIX: FINDINGS - DECISION MAKING - METRICSRESPONDANT COMMENTS: ‘IS YOUR ORGANISATION CONFIDENT THAT IT IS MEASURING...
SECTION SIX: FINDINGS - DECISION MAKING - METRICSA cross tabulation analysis of the questions        the group that is not...
SECTION SIX: FINDINGS - DECISION MAKING - METRICSFIGURE 13: HOW DOES YOUR ORGANISATION DECIDE WHICH METRICS AND KPIS ARE I...
SECTION SIX: FINDINGS - DECISION MAKING - METRICSFIGURE 14: CROSS TABULATION ANALYSIS OF ‘HOW DOES YOUR ORGANISATION DECID...
SECTION SIX: FINDINGS - DECISION MAKING - METRICSFIGURE 15: WHAT WOULD YOU SAY IS THE TOP CHALLENGE IN CHOOSING THE RIGHT ...
SECTION SIX: FINDINGS - DECISION MAKING - METRICSHaving the right context, skills and             crucial as being clear o...
6.5: DECISION MAKING - OPTIMISATIONFIGURE 17: HOW OFTEN DOES YOUR ORGANISATION REVISE AND CHANGE ITS METRICS OR KPI FOCUS?...
6.6: DECISION MAKING - CULTUREFIGURE 18: ARE EMPLOYEES IN YOUR ORGANISATION ENCOURAGED TO BACK UP THEIR DECISIONMAKING WIT...
SECTION SIX: FINDINGS - DECISION MAKING - CULTURE   FIGURE 19: WHAT IS THE BIGGEST CHALLENGE YOU HAVE FACED WHEN BUILDING ...
THANKS TO EVERYONE WHO RESPONDED TO THE SURVEY.           COMMENTS OR QUESTIONS - EMAIL SOFIA@GECKOBOARD.COM              ...
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Data driven culture in startups (2013 report)

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Results of a global survey of 368 startups carried out by Geckoboard and Econsultancy into startup organisations use data to drive their business and establish a culture.

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Data driven culture in startups (2013 report)

  1. 1. A global survey on the state of data drivenculture within startups
  2. 2. ContentsSECTION ONEAbout Geckoboard 1SECTION TWOAbout Econsultancy 2SECTION THREEForeword 3SECTION FOURExecutive Summary 4SECTION FIVEMethodology 7 Respondent Profiles 7SECTION SIXFindings 9 Data Driven Culture 9 Data Collection 10 Data Communication 15 Decision Making 19 Metrics 19 Optimisation 26 Culture 27
  3. 3. SECTION ONE About GeckoboardGeckoboard is a hosted status board able to better assess that information — withthat collects business information from dashboards being the mainstay for how it’smany online services and customers’ own presented and consumed.data sources, summarises it to distil thekey messages and displays it in a way 90% of customers have reportedthat is easy to understand and interpret. improving their decision-making thanks toBusinesses use status boards to pull Geckoboard.important information locked up in disparate Since launching in February 2011,services together into one place to give a Geckoboard has picked up some 2,500real-time status on the health of all aspects customers, including Atlassian, Groupon,of a business. Gdgt, SecondMarket and Stack Exchange.Geckoboard has called itself the “Chartbeat Stop spending time checking services andfor everything else” — in reference to the start monitoring your business in real-time.tool used to monitor traffic and other metrics All your information available all the time, aton websites. Geckoboard’s rise speaks a glance. In 30 days, you won’t rememberof a growing trend among businesses to how your business ran without it. Get a freeconsolidate ever-growing lists of diagnostics trial here.and information into simpler views to be 1
  4. 4. SECTION TWO About EconsultancyEconsultancy is a global independent decisions, build business cases, find thecommunity-based publisher, focused best suppliers, accelerate their careers andon best practice digital marketing and lead the way in best practice and innovation.ecommerce, and used by over 400,000internet professionals every month. Econsultancy has offices in London, New York, Singapore and Sydney,and we are aOur hub has 185,000+ subscribers leading provider of digital marketing trainingworldwide from clients, agencies and and consultancy. We trained over 5,000suppliers alike with over 90% subscriber marketers and ran over 200 public trainingretention rate. We help our subscribers build courses in 2012.their internal capabilities via a combinationof research reports and how-to guides, Join Econsultancy today to learn what’straining and development, consultancy, happening in digital marketing – and whatface-to-face conferences, forums and works.professional networking. Call us to find out more on +44 (0)20 7269For the last 10 years, our resources have 1450 (London) or +1 212 971 0630 (New York).helped subscribers learn, make better You can also contact us online. 2
  5. 5. SECTION THREE ForewordGeckoboard is pleased to present the data, how metrics are being chosen,results of the first Global Report on Data how resources are being assigned, theDriven Culture Within Startups, which was importance of data visibility and the mostdesigned to offer insights on how startups popular tools for data communication.are dealing with an ever growing influx ofdata and the key challenges faced when The report reveals that businesses are,building organisations that embrace data as in general, actively looking to improvemuch as intuition. their efforts towards building a data driven culture. So far, most of the efforts have beenData driven decision-making has been made in data gathering and analytics, withfuelled by terms like ‘Lean Startup’ and very little progress in data communication‘Lean Analytics’. Eric Ries coined the term and mechanisms to ensure that data is acted‘lean startup’ in 2008 and since then, it has upon. Surprisingly, most respondents dogrown in popularity among entrepreneurs. not feel confident about their KPIs and theirThe term has now become a movement that current challenge is to understand what thehas brought innovative thinking around how key drivers of the business are, to ensureto design, build and develop sustainable that they build the right context for databusinesses based on customer feedback. analysis.As the lean movement evolves, the We hope that you find the results of thisemphasis on data driven decision-making survey to be informative, and thank youbecomes more relevant. This report offers again to those who participated. We lookan overview on how startups are using forward to your participation in the future. 3
  6. 6. SECTION FOUR Executive SummaryThis report explores the general attitude of startups towards metrics and data communication.It offers an overview on: 1 How startups are gathering, analysing and communicating data. 2 How much time and resources are spent on analytics. 3 What challenges are involved in building a data driven culture and monitoring the right metrics. 4 Data visibility and its impact on decision-making.This report is based on a global survey of 368 startups carried out by Geckoboard andEconsultancy.We would like to thank all the organisations that took part in the survey and those whocontributed with insights, analysis and valuable comments. 4
  7. 7. SECTION FOUR: EXECUTIVE SUMMARYThe findings of this research can be summarised as follows:The vast majority of respondents Metrics democracy. In more cases thanidentified themselves as data driven not, respondents who choose metrics in abusinesses; only 5% of respondents collaborative manner felt more confidentstated that data is not a priority within their about their metrics in comparison to thoseorganisation. who do not involve the team.Intuition is still highly valued in decision- Data vs. Data communication: 44% ofmaking. Despite the rapid adoption startups spend substantially more on dataand evangelisation of the lean startup gathering than on data communication,methodology (see Section 3) and the with 34% of respondents spending equallyconstant emphasis on data collection and on both. This highlights the importance ofmeasurement within the startup community, developing mechanisms to guarantee thatit is surprising to find that intuition and data is collected with a purpose and thatexperience are still heavy components of key insights can be derived from it. Thethe decision-making process. Only 27% improvement of data communication canof respondents believe that data is crucial lead to a better understanding of what iswhen it comes to decision-making. important to measure and what is not.There is a marked lack of confidencearound data and metrics. Almost half ofthe respondents (49%) do not feel confidentabout the metrics they are currently “If you cant explainmonitoring. Based on analysis of data it simply, you dontgathered in this report, this group is alsoless likely to have processes in place to understand it wellensure that data is understood and acted enough.”upon. ALBERT EINSTEIN 5
  8. 8. SECTION FOUR: EXECUTIVE SUMMARYThe survey also showed that real time data and dashboards are increasingly beingadopted by startups as a communication tool although traditional formats like Excel are stillthe most popular.Despite the investment on tracking, data gathering and analytics, 59% of respondents donot have processes in place to make sure data is understood and acted upon. 6
  9. 9. SECTION FIVE MethodologyThis report is based on a global survey of Econsultancy also promoted the survey via368 business professionals working in the social media. The incentive for taking part instartup community, but also included larger the survey was a complimentary copy of thebusinesses so that general attitudes towards report.data management were represented. Thesurvey was live during January and February If you have any questions about the2013. research and methodology, please email Sofia Quintero at Geckoboard (sofia@Geckoboard promoted the survey to its geckoboard.com).customer data base and via social media.5.1 RESPONDENT PROFILESA total of 368 business professionals took the United Kingdom are also significantlypart in the survey. The greatest proportion represented.of respondents work in the internet/softwareindustry (42%), though a range of other The following chart shows that theindustries are represented. survey respondents are typically senior within their organisations, with over 70%Respondent organisations are primarily classifying themselves as founders, CTOs,based in North America, although Asia, Latin CEOs, directors, or presidents of theirAmerica, Western Europe and specifically organisations. 7
  10. 10. FIGURE 1: WHAT IS YOUR POSITION IN THE ORGANISATION? FOUNDER / CEO FOUNDER / CTO OTHER DIRECTOR DEVELOPER MANAGER ANALYTICS EXECUTIVE MANAGER MARKETING PRESIDENT ADMIN / SUPPORT 0% 10% 20% 30% 40%The aim of the survey was to look at the Figure 2 shows the size of the respondingattitude of startups towards data collection companies. More than 80% of respondingand analysis; therefore the survey was companies have less than 100 employees,marketed towards respondents from reflecting the startup focus of the report.companies with less than 20 employees.FIGURE 2: WHAT IS THE SIZE OF YOUR ORGANISATION? 30 NUMBER OF RESPONDENTS 23 16 9 2 1-4 5-9 10-19 20-99 100- 500- 10,000+ 499 9,999 NUMBER OF EMPLOYEES 8
  11. 11. SECTION SIX Findings6.1 DATA DRIVEN CULTUREDefinition: A ‘Data Driven Organisation’ is uses technology to communicate dataone that cultivates a culture where data is in a clear and approachable way. In thisvalued as much as intuition and experience; kind of organisation, decision-making is awhere data is visible and accessible to collaborative process and metrics are seteverybody. A data driven organisation based on very specific business goals.FIGURE 3: BASED ON THE DEFINITION ABOVE, WOULD YOU CONSIDER YOUR ORGANISATION TO BEDATA DRIVEN?Yes 26% - since thevery beginning we madesure data was part of ourculture No 7% - this is not a priority in my organisation; only management make decisions Yes 44% - we have made great improvement and are still working on it 9
  12. 12. SECTION SIX: FINDINGS - DATA DRIVEN CULTUREFigure 3 shows that the majority of this area. A total of 70% of respondentsrespondents not only understand the consider their organisation to be data-importance of building a data driven driven, with only 7% of respondentsculture, but are also proactively looking into believing that being data driven is not amechanisms that will allow them to improve priority.6.2 DATA COLLECTIONAs the industry moves forwards with new ever growing data points available totechnologies able to track data in very organisations, the illusion of having all thegranular and sophisticated ways, there data needed in order to make decisionsis also a need for simplification. With starts to blur with information overload.FIGURE 4: TO YOUR BEST KNOWLEDGE, HOW MANY THIRD PARTY SERVICES OR SYSTEMS DOESYOUR ORGANISATION CURRENTLY USE TO GATHER DATA? 60% PERCENTAGE OF RESPONDENTS 45% 30% 15% 0% 1-4 4-9 10+ DON’T KNOW NUMBER OF SERVICES 10
  13. 13. SECTION SIX: FINDINGS - DATA COLLECTIONNearly a fifth (18%) of respondents in the assessment of business performance.survey said that they used more than 10 Google Analytics alone offers over 200different services to gather data, revealing pre-defined dimensions and metrics tothe wealth of data that can be collected. The choose from and combine. Choosing thelist of potential metrics available to decision right metrics within the right context is onemakers represents a constant challenge of the most crucial tasks for data drivenwhen it comes to executing a focused organisations.FIGURE 5: HOW MANY FULL TIME EMPLOYEES DOES YOUR COMPANY CURRENTLY HAVE WORKING ONDATA GATHERING, ANALYSIS AND DISTRIBUTION ROLES? 60% PERCENTAGE OF RESPONDENTS 45% 30% 15% 0% 1-4 4-9 10+ NONE NUMBER OF EMPLOYEES77% of respondents have at least one full- and analysis.time employee working on data gathering 11
  14. 14. SECTION SIX: FINDINGS - DATA COLLECTION Figure 6 shows the number of employees employees, however also reveals that a working on data, against the size of surprisingly large proportion of respondents the company. As expected, the larger have no employees working on data, even organisations are more likely to have a in organisations with up to 100 employees. higher number of data-dedicated FIGURE 6: THE NUMBER OF EMPLOYEES FOCUSED ON DATA, CHARTED BY THE TOTAL NUMBER OF EMPLOYEES IN THE ORGANISATION.60%45%30%15%0% 1-4 5-9 10-19 20-99 100-499 500- 10,000 9,999 SIZE OF ORGANSIATION (EMPLOYEES) BETWEEN 1-5 BETWEEN 5-10 10+ NONE Based on respondents’ comments data of data-focused employees, with it being collection and analysis is not always the part of the role of many, but the sole role responsibility of a dedicated staff member, of none. It is evident that software is also being a shared responsibility across multiple relied upon by many respondents to do teams and with roles extended to include the data gathering and analysis, but many data management. This could affect how organisations assign no specific person to respondents were counting the number pull insights from this analysis. 12
  15. 15. SECTION SIX: FINDINGS - DATA COLLECTIONRESPONDENT COMMENTS: ‘HOW MANY FULL-TIME EMPLOYEES DOES YOUR COMPANY CURRENTLYHAVE WORKING ON DATA GATHERING, ANALYSIS AND DISTRIBUTION ROLES? “I do product, and “There is no dedicated “This is distributed one other guy does staff – it is a shared across the team.” core-business metrics.” responsibility.” “One person “We can’t afford a “Support and Services is delegated salary of £35k+ to focus on customer responsibility and analyse our data; data and our software accountability for this. many of us have itself is geared However, it is not a managed people and towards data analysis full-time equivalent roles which do this and gathering.” aspect.” kind of work. We have extended our roles to do this, as this will drive decisions in the company.” “Right now I am the only person. I am using software to try to do automatically, such as the integrations with Sugar CRM and other apps to help do auto tracking.” 13
  16. 16. SECTION SIX: FINDINGS - DATA COLLECTIONFIGURE 7: WHAT IS THE BALANCE BETWEEN RESOURCES SPENT IN GATHERING DATA (BIG DATA) ANDCOMMUNICATING DATA (REAL TIME METRIC DASHBOARDS, REPORTS)? 44% - We spend34% - We spend equally substantially more in dataon both gathering22% - We spendsubstantially more in datacommunicationData gathering rather than data 34% of respondents put equal emphasis incommunication seems to be the priority both processes. Data becomes irrelevantamong startups with 44% of respondents if organisations cannot make sense of it orspending more on data gathering. Only communicate insights clearly throughout the22% put more emphasis on how data is organisation.communicated. It is surprising that only 14
  17. 17. 6.3 DATA COMMUNICATIONFIGURE 8: WHAT IS THE MOST COMMON FORMAT FOR DATA COMMUNICATION IN YOURORGANISATION? 6% - Other 32% - Dashboards or real time display technology 8% - Powerpoint presentations24% - Reports exporteddirectly from third partysystems and applications 30% - Excel SpreadsheetsExcel spreadsheets and dashboards are to share data among teams are: Googleseen to be the preferred tools used to Docs, Trello and proprietary tools andshare data within organisations. Real-time dashboards.technology has been rapidly gaining inpopularity among startups due to its ability Given the volume of metrics that canto rapidly show data, which is vital in a be tracked and gathered, it is crucialbusiness as agile and changeable as a for startups to find appropriate tools tostartup. communicate that data and make sure it is understood throughout the organisation,Based on comments provided by and, vitally, that it is acted upon.respondents, other tools and formats used 15
  18. 18. SECTION SIX: FINDINGS - DATA COMMUNICATIONFIGURE 9: ARE THERE ANY PROCESSES IN PLACE TO MAKE SURE THAT DATA IS UNDERSTOOD AND ACTEDUPON? 60% PERCENTAGE OF RESPONDENTS 45% 30% 15% 0% YES NORespondents were asked if they had any that data is understood and actionable.processes in place to make sure that datais understood and acted upon; the majority Below are some examples of processesanswered no. It is surprising to find that even given by responding companies. Meetingsthough 70% of the respondents consider and verbal discussions are popular totheir organisations to be data driven, the decipher data, with dashboards and KPIssame organisations are also typically also used to prompt discussion and reviews.currently lacking mechanisms to make sure 16
  19. 19. SECTION SIX: FINDINGS - DATA COMMUNICATIONRESPONDENT COMMENTS: ‘ARE THERE ANY PROCESSES IN PLACE TO MAKE SURE THAT DATA IS UNDER-STOOD AND ACTED UPON?’ “Analysts and managers “Bonuses based on key “Creation of a data review reports.” metrics” warehouse” “Trending service usage “Verbal report out, each “Custom dashboard” prompts management section is discussed for review.” clarity” “Tied directly to feature releases, watching “We are looking at “Weekly meetings to metrics move, metric- dashboards to make comment on metrics driven goals, etc.” data accessible” (founders and investors); benchmarking cross- portfolio” “We write blog posts. We set OKRs (objectives and key results) that are basically hypotheses that require data to prove them (or disprove them) within a set period of time.” 17
  20. 20. SECTION SIX: FINDINGS - DATA COMMUNICATIONFigure 9 shows a chart of the data in Figure It may be the case that these companies8, combined with data from the question: analyse their data in a more fluid way, in‘Would you consider your organisation to meetings and ad hoc by individuals, ratherbe data driven?’ (Figure 3). It is interesting to than having stringent processes in placesee that 12% of respondents said that their for acting upon data. Due to the nature of aorganisations were data driven, and had startup, these processes may not have yetbeen since the very beginning, but at the been put in place, but the case may be thatsame time did not have any processes in in some companies a lot of data is beingplace to make sure that data is understood collected, without much meaningful insightand acted upon. being gained from it.FIGURE 10: CROSS TABULATION ANALYSIS OF ‘WOULD YOU CONSIDER YOUR ORGANISATION TO BEDATA DRIVEN?’ (FIGURE 3), AGAINST FIGURE 9: ‘ARE THERE ANY PROCESSES IN PLACE TO MAKESURE THAT DATA IS UNDERSTOOD AND ACTED UPON?’ Are there any processes in place to make sure that data is understood and acted upon? Yes No No, but we are mobilizing resources and efforts to improve 8% 15% in this area No, this is not a priority in my Would you consider organization; only 1% 4% management your organisation to makes decisions be data driven? Yes, we have made great improvements and 19% 27% are still working on it Yes, since the very beginning we made sure data was part of our 13% 12% culture 18
  21. 21. 6.4 DECISION MAKING - METRICSFIGURE 11: IS YOUR ORGANISATION CONFIDENT THAT IT IS MEASURING THE RIGHT METRICSAND KPIS? 60% PERCENTAGE OF RESPONDENTS 45% 30% 15% 0% YES NOAlmost half of the respondents do not 61% of respondents said that the keyfeel confident about the metrics they are challenge in choosing the right metricstracking. When viewed in the context of was in understanding the key drivers ofa startup culture, these results are not all the business. Uncertainty is at the core ofthat surprising. Most of the respondent startups so being flexible to test and trycomments on this question are around the different approaches to measurement isneed to be flexible and open minded to more a survival practice than an option.changes. It is part of the lean startup cultureto avoid making assumptions without having Comments from the survey respondentsa way to prove them. Being confident supported this theory, with many stating thatabout the current metrics could be, to they were still evolving and that there wassome companies, like declaring that the always more data that they could look at.organisation has stopped learning. Agility is a key requirement for startups, with changing metrics being part of learning andThis is also reflected in Figure 11, where evolving for the benefit of the business. 19
  22. 22. SECTION SIX: FINDINGS - DECISION MAKING - METRICSRESPONDANT COMMENTS: ‘IS YOUR ORGANISATION CONFIDENT THAT IT IS MEASURING THE RIGHTMETRICS AND KPIS?’ “We could always “You never can be sure “I’d say yes... but always measure more!!” until enough data has learning new ones. So arrived and fine-tuning is 75% confident.” always needed.” “At least confident that we’re evolving in the “Reasonably, there’s right direction.” “Metrics are under always space for continual review for improvements.” relevance and validity.” “We are in the early stages - trying to “Working on switching tackle one area of our “We’re still in our search from vanity metrics to operations at a time.” mode.” pirate metrics.” “Can’t ever be totally “Our KPIs are in “We’re doing our best confident, we’re always significant flux as the as we remain agile.” trying to improve our company is still in a metrics” development phase.” “We’re constantly iterating, whilst “We are confident that we have some good KPIs but expanding are confident they can always be better. We evolve as geographically and in we learn more.” scale, so it would be hard to ever say ‘yes’.”
  23. 23. SECTION SIX: FINDINGS - DECISION MAKING - METRICSA cross tabulation analysis of the questions the group that is not confident that they are‘Is your organisation confident that it is measuring the right metrics, also seem tomeasuring the right metrics and KPIs?’ and be less likely to have processes in place‘Are there any processes in place to make in ensure that data is understood andsure that data is understood and acted acted upon. A third (33%) of respondentsupon?’ is shown below. There is a lack of answered ‘No’ to both questions.confidence around data and metrics, andFIGURE 12: CROSS TABULATION ANALYSIS OF FIGURE 9 AND FIGURE 11. Are there any processes in place to make sure that data is understood and acted upon? Yes No Is your organisation confident that it is Yes 26% 26% measuring the right metrics and KPIs? No 16% 33% 21
  24. 24. SECTION SIX: FINDINGS - DECISION MAKING - METRICSFIGURE 13: HOW DOES YOUR ORGANISATION DECIDE WHICH METRICS AND KPIS ARE IMPORTANT? 60% PERCENTAGE OF RESPONDENTS 45% 30% 15% 0% IT IS A COLLABORATIVE NON-STRUCTURED, KPI’S PROCESS. EVERYBODY CHOSEN BY DIFFERENT CONTRIBUTES PEOPLE. CASE-TO-CASE BASIS TOP LEVEL MANAGEMENT ONLY SPECIFIC MAKES THE DECISION DEPARTMENTS GET INVOLVEDJust over half (51%) of respondents embrace seems to be an important characteristiccollaborative thinking around metrics. of data driven organisations, with 51% ofA quarter (25%) still depend on the top respondents deciding their metrics andmanagement level to define key metrics KPIs through a joined-up process. As seenand 19% have a non-structured/informal in the comments provided in Figure 5,approach to metrics management. The responsibility for data gathering and analysisremaining 5% choose metrics in isolation, is often shared among several people in thepotentially by department. organisation, and it therefore makes sense to choose metrics as a team and not inA collaborative approach to metrics isolation. 22
  25. 25. SECTION SIX: FINDINGS - DECISION MAKING - METRICSFIGURE 14: CROSS TABULATION ANALYSIS OF ‘HOW DOES YOUR ORGANISATION DECIDE WHICHMETRICS AND KPIS ARE IMPORTANT?’ AGAINST FIGURE 11: ‘IS YOUR ORGANISATION CONFIDENTTHAT IT IS MEASURING THE RIGHT METRICS AND KPIS?’ Is your organisation confident that it is measuring the right metrics and KPIs? Yes No Top-Level management makes 11% 14% the decision It is a collaborative How does your process. Everybody 31% 20% organisation decide contributes. which metrics and KPIs are important?’ Only specific depart- ments get involved in 2% 3% measurement It is non-structured, KPIs are chosen by different people in a case-by- 7% 12% case basisFigure 13 shows that respondents who only category in which more respondentschoose metrics in a collaborative manner answered that they were confident in theirfeel more confident about their metrics in metrics (31%) than those that said they werecomparison to those who do not involve the not confident (20%).team. ‘It is a collaborative process’ is the 23
  26. 26. SECTION SIX: FINDINGS - DECISION MAKING - METRICSFIGURE 15: WHAT WOULD YOU SAY IS THE TOP CHALLENGE IN CHOOSING THE RIGHT METRICS?[RESPONDENTS COULD SELECT MORE THAN ONE OPTION] UNDERSTANDING THE KEY DRIVERS OF THE BUSINESS HAVING THE RIGHT TRACKING IN PLACE DEFINING PRIORITIES AND BUSINESS GOALS HAVING THE RIGHT CONTEXT LACK OF SKILLS AND RESOURCES HAVING CONSENSUS WITHIN THE ORGANIZATION 0% 20% 40% 60% 80%The majority of respondents said that a key challenging to identify the key drivers ofchallenge in choosing the right metrics to the business when, in some cases, themeasure was in understanding what the key business model has not been fully defineddrivers of the business are (61%), followed by or implemented. However, concentratinghaving the right tracking in place (42%) and on one key metric can help to minimizedefining priorities and business goals (39%). ‘paralysis by analysis’. This is what the authors of Lean analytics call ‘The OneThe nature of startups implies that historic Metric That Matters’. They explain:data is not always available, so it is “The One Metric That Matters is the one number you’re completely focused on above everything else for the stage you’re at. Looking at CLV (customer lifetime value) isn’t meaningful when you’re validating a problem, but it might be the right metric to focus on as you’re approaching product/market fit. It most certainly is not a vanity metric!”1 “Customer Lifetime Value (CLV) is a formula that helps a marketing manager arrive at the monetary value associated with long termrelationships with any given customer, revealing just how much a customer relationship is worth over a period of time” http://hbsp.harvard.edu/multimedia/flashtools/cltv/index.html 24
  27. 27. SECTION SIX: FINDINGS - DECISION MAKING - METRICSHaving the right context, skills and crucial as being clear on what the businessconsensus seem to be important but not as direction is.FIGURE 16: WOULD YOU SAY THAT YOUR ORGANISATION HAS MISSED BUSINESS OPPORTUNITIES INTHE LAST 12 MONTHS AS A CONSEQUENCE OF NOT HAVING ENOUGH DATA VISIBILITY? 60% PERCENTAGE OF RESPONDENTS 45% 30% 15% 0% YES MAYBE NOA third (34%) of respondents believe that enough data visibility.they have missed business opportunities asa consequence of not having enough data There seems to be some inconsistencyvisibility, and 47% answered ‘maybe’. in the perceived effectiveness of those mechanisms, and it is clear thatIt is interesting to note that respondents organisations see data collection as almostwho said that their organisations had unlimited, with many commenting that itmechanisms to ensure data was acted is impossible to measure everything,upon also said that they have, or may have, so missed business opportunities aremissed business opportunities in the last somewhat inevitable.12 months as a consequence of not having 25
  28. 28. 6.5: DECISION MAKING - OPTIMISATIONFIGURE 17: HOW OFTEN DOES YOUR ORGANISATION REVISE AND CHANGE ITS METRICS OR KPI FOCUS? 40% PERCENTAGE OF RESPONDENTS 30% 20% 10% 0% WEEKLY MONTHLY 6 MONTHS YEARLY NEVERRespondents were asked the frequency Only once everyone understands thein which they change their metrics or KPIs key metrics, can they collectively work tofocus. 37% said every 6 months, and 27% optimise them. The frequency with whichsaid every month. For startups, the key this is done depends on the industry andmetrics for driving revenue, profitability and service provided by the organisation, butproductivity need to be established and revision of metrics and KPIs is important tounderstood across the business. ensure a business is collecting the right data and acting on it. 26
  29. 29. 6.6: DECISION MAKING - CULTUREFIGURE 18: ARE EMPLOYEES IN YOUR ORGANISATION ENCOURAGED TO BACK UP THEIR DECISIONMAKING WITH DATA? 60% PERCENTAGE OF RESPONDENTS 45% 30% 15% 0% YES, THIS IS NO SOMETIMES CRUCIAL YES, BUT WE ALSO BELIEVE IN INTUITION AND EXPERIENCE ON ITS OWNWhen asked if employees are encouraged of the key mantras of the lean startupto back up their decision making with data, methodology is to base all decisions51% of respondents said that they also on metrics, assumptions and validation.believe in experience and intuition when Feelings and intuition are not necessarilyit comes to decision-making. Just over a part of the equation. However, as startupsquarter of respondents (27%) said data is try to move fast and manage uncertainty,crucial. some decisions are inevitably made based on experience and the data availability andThe lean startup and lean analytics gut feelings. The challenge will always be incommunity would strongly agree with establishing the right balance.the latter quarter of respondents. One 27
  30. 30. SECTION SIX: FINDINGS - DECISION MAKING - CULTURE FIGURE 19: WHAT IS THE BIGGEST CHALLENGE YOU HAVE FACED WHEN BUILDING A DATA DRIVEN CULTURE? LACK OF RESOURCES FOR THE RIGHT DATA COMMUNICATION TOOLS ATTITUDE: DATA NOT CONSIDERED A PRIORITY DATA OWNERSHIP. UNCLEAR WHOSHOULD GATHER, ANALYSE AND REPORT LACK OF RESOURCE TO INVEST IN TRAINING LACK OF CLARITY ABOUT WHAT DATA CAN BE DISTRIBUTED OR NOT INTERNAL POLITICS. PEOPLE REFUSED TO SHARE INFORMATION 0% 10% 20% 30% 40% The SaaS data communication industry in creating a data driven culture. Lack of clarity fairly new and even though status boards was also a challenge; specifically in data technology and real time solutions are ownership (18%) and data distribution issues emerging rapidly, the benefits of data (10%). visualization and visibility are still widely unknown. In an industry where data is needed to analyse performance and rapidly make Respondents were asked to select the changes to remain agile, having the biggest challenges they have faced when resources to invest in data communication building a data driven culture. Resources tools is important, as without the data, were a key issue; 37% of respondents said the drivers of the business cannot be that a lack of resources to invest in the ascertained, and performance cannot be right data communication tools was their improved. The lean startup methodology main challenge, with 10% citing a lack of would advocate that organisations should resources to invest in training. be built on their data, and therefore investing in resources for data collection A fifth (20%) of respondents blamed and communication is vital. attitudes towards data for difficulties in 28
  31. 31. THANKS TO EVERYONE WHO RESPONDED TO THE SURVEY. COMMENTS OR QUESTIONS - EMAIL SOFIA@GECKOBOARD.COM A global survey on the state of data driven culture within startups ©2013 GECKOBOARD/ECONSULTANCY - ALL RIGHTS RESERVED.NO PART OF THIS PUBLICATION MAY BE REPRODUCED OR TRANSMITTED IN ANY FORM OR BY ANY MEANS,ELECTRONIC OR MECHANICAL, INCLUDING PHOTOCOPY, RECORDING OR ANY INFORMATION STORAGE AND RETRIEVAL SYSTEM, WITHOUT PRIOR PERMISSION IN WRITING FROM THE PUBLISHER.

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